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Parties table 60 amendments to budget

The House finance committee on Monday collated some 60 amendments to the state budget bill tabled by the parties, proceeding with business as usual despite the possibility of the 2021 budget not being put up for a vote at all later this week.

The debate process in the House plenum, leading up to the actual vote on Thursday – after which parliament breaks for the Christmas recess – normally begins on Tuesday.

However, due to the likelihood of the budget bill not mustering enough votes this time around, the debate process might be suspended altogether. Under the rules, once the debate process gets underway it must culminate in a vote.

For this reason, the president of the House and the leaders of the parliamentary political parties will be holding a meeting on Tuesday morning to decide whether to green-light the process or halt it.

As it stands, the government bill lacks a plurality of votes in the House – it’s outnumbered by 26 to 23 currently – although that could change in the meantime should the smaller parties, who have yet to show their cards, lend their backing.

Regardless, as per protocol on Monday the House finance committee drafted a memo on the budget featuring the parties’ remarks on the balance sheet as well as on government policy in general.

In their remarks, junior opposition party Diko noted their skepticism at the government’s sanguine forecasts for an economic rebound once the Covid-19 pandemic recedes.

It said that households’ and businesses’ mounting financial obligations – temporarily papered over thanks to the coronavirus-related state relief – would begin manifesting in the real economy in 2021. This in turn would impact the government’s tax revenue stream.

Diko said the various support schemes have an expiry date, they are but a quick fix, but beyond that the government has not indicated how it will deal with the anticipated rise in unemployment in the medium to long term timeframe.

Likewise the Greens criticised the government for its lack of vision. They said the government has passed up on the opportunity to invest in the primary and secondary sectors of the economy – agriculture, livestock farming, cottage industries, or energy production.

Rather, the government continues to rely on the tertiary sector – services and banking.

Amid the recession, the government forecasts that GDP will shrink by 5.5 per cent this year – better than earlier projections of a 7 per cent decline.

The finance ministry expects the economy to start recovering next year, forecasting a 4.5 per cent growth compared to 2020.

The joblessness rate is projected to drop back to around 7 per cent in 2021, and to 6 per cent in 2022.

As for the public deficit for 2020, it will come to 4.5 per cent of GDP (from a 1.7 per cent surplus in 2019), as the public debt jumps to 115 per cent of GDP.

 

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